A new consumer group has surfaced to challenge mergers of Blue Cross and Blue Shield organizations, beginning with the proposed consolidation of the Blues plans in Maryland and the District of Columbia.
The Fair Care Association, a Washington-based not-for-profit corporation, was formed because of changes in the healthcare industry that potentially could subordinate the interests of consumers, said John Ellison, an attorney for the group.
Fair Care's aim is to make sure regulators and other decisionmakers "consider consumer policyholders on an equal basis" with insurers and providers, Ellison said.
The group last week lodged its opposition to the consolidation of Blue Cross and Blue Shield of Maryland and Blue Cross and Blue Shield of the National Capital Area.
The two plans proposed their merger in January, and they filed for approval with insurance regulators in Maryland and the District of Columbia in April (April 7, p. 86).
Representatives of the two plans outlined their consolidation and the rationale for it to the District of Columbia Insurance Administration, which must clear the deal. Maryland's insurance commissioner will conduct hearings in October.
In a letter to the District of Columbia's insurance commissioner, Fair Care said the consolidation of the two Blues plans under one holding company would violate the district plan's public trust by allowing charitable assets and premium revenues to be spent outside the service area.
The National Capital Area plan covers the district, two adjacent counties in Maryland and parts of Northern Virginia. The Maryland plan serves the rest of the state.
Blues representatives maintain that once consolidated the two plans would continue to operate much the same way but would eliminate redundant efforts. They also said the larger Blues organization would be better able to compete with national managed-care companies.
Ellison said although the two plans operate as subsidiaries under the yet-to-be-named holding company, the Maryland plan would assert control by holding the majority of seats on the proposed new boards.